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Industry Wants Exemption from SAFE Act
March 8, 2010
Mortgage servicing employees who help troubled borrowers with loan modifications should be exempt from the licensing and registration requirements of the SAFE Act, according to a comment letter by three industry groups. The trade groups note that the Department of Housing and Urban Development is considering bringing certain servicing personnel under the Safe and Fair Enforcement for Mortgage Licensing Act (SAFE), which is intended to ensure uniform licensing and registration of loan officers and mortgage brokers. The American Financial Services Association, American Bankers Association, and Mortgage Bankers Association argue that there is no basis to impose SAFE requirements on mortgage servicing employees. Such an "undue expansion" of SAFE, the trade groups warn, could hamper the process of serving troubled borrowers.
LoanMarket.net Sees Growth in Commercial Offerings
March 5, 2010
LoanMarket.net, an online seller of nonperforming loans, is seeing an increase in its commercial business. The Irvine-based auction company said over the past two months it has closed between $30 million and $50 million of commercial mortgage deals. Jeff Freud, a principal in the company, noted that LMN is continuing to hire and now employs 13 full-timers. The company began holding live online auctions about a year ago. He added that buyer demand has picked up this year, adding that most of the winning bids are placed by private equity firms and hedge funds.
GMAC Bids Problem Mortgage Assets
March 5, 2010
GMAC Financial Services has auctioned off $250 million of problem mortgage assets, using Citigroup as its broker on the deal. A spokeswoman for GMAC said the bid process "went very" well but at press time no other details were available on the process including information about bidders and what they offered. The spokeswoman said, "Our plan is to continue to sell assets through the year in our normal course of business and as we have done historically." She added, "We are not interested in pursuing transactions that don't have the right economic value." GMAC and its mortgage division, Residential Capital Corp., are saddled with billions of dollars of troubled non-prime loans and securities. One investor involved in the bid process said he passed on making an offer on the pool "because they wanted us to bid based on 2008 appraisals that they did." He said he was not allowed to take a hard look at current values on the underlying assets. "We will not bid on assets without the ability to determine the underlying value." This investor, requesting anonymity, said many large sellers are operating in a fashion similar to GMAC.
Clear Capital: National Year-Over-Year Price Increase Reaches 5%
March 4, 2010
There are flat quarter-over-quarter price changes against year-over-year home price gains of 5% said the latest Clear Capital Home Data Index Market Report. This is based on data through February 2010. According to the Truckee, Calif.-based data provider all four regions posted very consistent 1.4% quarterly price changes, which company analysts called encouraging. Despite the slowdown due to negative economic news and the threat of more real estate owned properties hitting the market "prices have remained positive through the first two months of the year," said Alex Villacorta, senior statistician at Clear Capital. Providence, R.I., rose to the top of the highest performing markets list with a 6.1% quarterly price change. In Los Angeles, prices gained 2.2% for the quarter, giving California five of the 15 highest performing markets. REO saturation edged up in 11 of 15 of these markets this month by an average of 1.3%. At the same time REO saturation is expected to increase this month, while traditional non-distressed sales wait to be listed in the spring and summer months, the report says. An increase in demand may precede the end of the April tax credit deadline when home prices may dip slightly into negative territory before getting an added boost back. The Boston area, one of the first to see prices drop at the beginning of the downturn, saw yearly home prices recover 6.9%.
Index Series Shows Severity of Home Price Decline Lessening
March 3, 2010
One series of a Freddie Mac index based on purchase transactions shows conventional home prices ended 2009 with a much smaller small year-to-year decline than was seen in 2008. Freddie's purchase-only series of its conventional home price index inched down 0.4% from the fourth quarter of 2009 from the same period in 2008, compared to a 9.5% drop in home prices during 2008. Between the third and fourth quarter of 2009, the U.S. index registered a 1.4% decline on an unadjusted basis. "We normally see a seasonal effect in the fourth quarter price index that reduces its value. A year-over-year comparison largely controls for this," said Freddie Mac chief economist Frank Nothaft. During 2009, "four-of-nine regions posted price gains, with the Pacific region showing a third consecutive quarterly gain as well as an annual increase in prices," he said. Another series of Freddie's conventional home price index that also includes data from appraisals from refinance deals shows typical U.S. home values depreciated 2.3% during 2009. This "classic" series shows average home values falling 0.7% in the fourth quarter of last year. "Generally, because appraisals are backwards looking through the use of recent comparable property transactions, the classic series will typically lag changes in the purchase-only series," Freddie Mac said.
Barclays Working on Three FDIC 'Note' Deals
March 3, 2010
Barclays Capital is taking orders from investors on at least one Federal Deposit Insurance Corp. structured note deal with two others on the way as the government moves to monetize at least $4 billion worth of product, according to hedge fund and investment bankers familiar with the matter. Two offerings by Barclays - both private placements - are actively being discussed in the market: a $1.33 billion floating rate deal, and a $480 million fixed-rate transaction. "The FDIC is putting a 100% guarantee on these," said one investment-banking source. The collateral includes residential and construction loans culled from failed banks. The buyer will pay a fraction of the assets' value, work the underlying loans, and share some of the upside with the government. But by selling structured notes, the agency will receive some cash upfront. At least one of the deals could close this week. The FDIC and Barclays declined to comment.
SAM Partners With RealtyTrac To Market REO Properties
March 2, 2010
Specialized Asset Management, a national provider of asset marketing and disposition services, is partnering with RealtyTrac to market its foreclosed property listings. The move will help SAM display its assets to RealtyTrac's customers. "Marketing our REO assets to RealtyTrac's visitors provides us with additional marketing visibility to help liquidate our REO assets," said Rudy Krupka, vice president of REO at Specialized Asset Management. "Our strategic partnership with RealtyTrac will assist our agents in promoting the properties to interested buyers across the country." RealtyTrac says the number of foreclosures is expected to increase significantly in 2010 as millions of payment option ARMs and alt-A mortgages reset in the next 12 to 18 months and double-digit unemployment plagues the national economy this year.
DebtX Unveils HUD and CRE Auctions
March 2, 2010
DebtX is auctioning off two separate commercial nonperforming loan portfolios totaling $411 million, the largest of which consists of 25 multifamily loans controlled by the Department of Housing and Urban Development. The HUD portfolio - $306 million in size - also includes a mortgage backed by a healthcare facility. DebtX, a government approved auction company, has set March 24 as the bid date. The company said it also is taking bids on a $105.5 million portfolio of nonperforming residential and commercial loans on a behalf of a "commercial bank in the western U.S." DebtX would not identify the seller. The bid date on the second offering is March 22.
DebtX to Sell $105.5 Million Portfolio
March 1, 2010
DebtX, a full-service loan sale advisor based in Boston, is selling $105.5 million in primarily non-performing loans for a regional bank in the western United States. The portfolio is comprised of 71 loans and 33 relationships. The collateral includes commercial and residential properties located primarily in California, Washington, Oregon and Arizona. The three largest loans in the pool have a combined principal balance of $47.6 million. Bids are due by 2 p.m. Eastern Daylight time on Monday, March 22, 2010. Due diligence materials are now available at www.debtx.com. "Over the past six months, the number of bids per offering at DebtX has increased an average of 25% due to heightened demand for performing and non-performing loans," said DebtX CEO Kingsley Greenland. "A growing number of equity buyers are seeking to re-enter the commercial real estate market by purchasing loans because many distressed properties are in default or are unable to service their debt."
Vendors Team Up on Short Sales
February 26, 2010
REA Accelerated Marketing Group, an online bidding platform, is partnering with short sale technology provider National Quick Sale. Short sales have been gaining in popularity but suffer from a delayed approval process. By putting the short sale up for auction the property gets more visibility and true market value can be assessed based on how much borrowers are willing to pay for the property vs. relying solely on a BPO or other type of valuation, the two companies said. At the MBA National Mortgage Servicing Conference in San Diego, Jim Satterwhite, EVP at National Quick Sale, said, "We have created a platform that brings all parties together. This is the type of synergy the industry needs to get things moving."
